As Malaysia embarks on a new fiscal year, Budget 2025 stands as a critical blueprint for the nation's growth.

This comprehensive budget outlines key highlights and strategic initiatives aimed at addressing pressing economic challenges while fostering innovation, sustainability, and inclusivity.

With a focus on enhancing public services, supporting small and medium enterprises (SMEs), and investing in infrastructure and digital transformation, the budget seeks to create a robust foundation for Malaysia's future. 

Continue reading to find out more!

Public Sector 

- RM1.8 billion allocated for the construction, maintenance, and repair of public servant quarters.

- Phased pension adjustments, including for retired Malaysian Armed Forces (ATM) personnel.

- Special Assistance of RM500 for civil servants (Grade 56 and below) in February 2025.

- Ministers and political appointees to continue with a 20% salary cut; Prime Minister declines salary.

National Security and Defense

- RM2.12 billion allocated for assets for the Royal Malaysian Police (PDRM) and uniformed agencies.

- RM560 million provided to strengthen national borders.

- Ministry of Defense allocated RM21.2 billion, an increase of RM1.4 billion.

- RM5.8 billion for new military assets and maintenance of existing ones.

- RM19.5 billion for the Ministry of Home Affairs, up by RM500 million.

Welfare and Social Support

- RM500 monthly assistance for ATM veterans without pensions, up from RM300.

- RM1 billion for elderly welfare, including cash assistance and institutional support.

- RM1.3 billion for disabled (OKU) support under JKM.

- Salary qualification for the OKU Worker Allowance increased to RM1,700.

Women, Youth, and Public Transport

- RM20 million allocated for Tunas Usahawan Belia Bumiputera (TUBE) program to support youth entrepreneurs.

- RM25 million for the Rakan Muda program to develop youth identity.

- Free public transport for all university, polytechnic, community college, and matriculation students using BAS.MY.

- Special van service for schoolchildren from select train stations, starting with LRT Sri Rampai and LRT Melati, at RM0.50 per trip.

Housing and Community Development

- RM900 million for 48 Residensi Rakyat programs and 14 Rumah Mesra Rakyat projects.

- Tax relief up to RM7,000 for first-time homebuyers with houses priced up to RM500,000.

- RM200 million for maintenance of low- and medium-cost public strata housing, including replacing old lifts.

- RM84 million allocated for upgrades to facilities in Chinese New Villages.

Health and Wellbeing

- RM1.35 billion allocated for the maintenance of healthcare facilities.

- RM25 million allocated for rare disease medical costs, with MySalam coverage expanded to include Rheumatoid Arthritis and rare diseases.

- Excise duty on sugary drinks to be increased by RM0.40 per liter, starting January 2025.

Education and TVET (Technical and Vocational Education and Training)

- RM50 million matching grants for industries participating in the ILKA "Adopt a Trainee" program.

- PTPK provides RM500 million in financing to benefit 20,000 trainees.

- HRDCorp to offer 3 million training opportunities with RM3 billion in funds.

- Khazanah allocates RM200 million for its Youth Development Program (K-Youth).

Workforce Training and Skills Development

- Short-term Gig Economy Training: GiatMARA will offer short-term training for over 3,000 gig workers.

- Technical Training for Huffaz: RM55 million over five years for GiatMARA and community colleges to train 10,000 Huffaz from tahfiz and pondok institutions.

- Youth Talent Development: Khazanah to invest RM200 million in the Khazanah Youth Program (K-Youth) to train 11,000 local talents for key sectors, including semiconductors.

- Massive Training Opportunities: HRDCorp to allocate RM3 billion to provide 3 million training opportunities.

- Funding for Priority Sectors: PTPK to offer up to RM500 million in financing for over 20,000 trainees, with RM100 million dedicated to NIMP sectors such as aerospace and AI.

- Apprenticeship Grants: RM50 million matching grants to expand industry participation in the Anak Angkat ILKA program.

- Automotive Training: Collaboration with PROTON through the PROTON Advanced Automotive Technology Institute to support curriculum development and training.

Education and Higher Learning

- Education Budget: RM64.1 billion allocated for education, the highest in history.

- School Upgrades: RM2 billion allocated for school upgrades and maintenance, focusing on dilapidated classrooms.

- Student Support: RM870 million for the School Meal Program, benefiting 860,000 students, and nearly RM800 million for Early Schooling Assistance for 5.2 million students.

- Higher Education: RM18 billion allocated for higher education institutions, with RM500 million for STEM students under PTPTN.

- New Schools: 44 new schools will be built nationwide in 2025.

Social Protection and Income Growth

- Minimum Wage Increase: The minimum wage will rise from RM1,500 to RM1,700 per month, effective February 2025.

- Social Protection: RM250 million allocated to support the hardcore poor through the IPR program, and i-Suri will continue with matching incentives.

- Insurance and Pensions: The Skim Perlindungan Tenang insurance program will continue, benefiting 2 million recipients.

- Elderly and Children Aid: The Senior Citizen Aid increased to RM600 per month, and child support for low-income families raised to RM250 for children under six and RM200 for those aged 7-18.

- Cost of Living Support: 4.1 million households will receive SARA assistance of RM100 per month starting in April 2025.

Economic Transformation and Business Funding

- Business Loans: RM40 billion in business loans and guarantees, with RM800 million in financing for Bumiputera entrepreneurs through MARA and PUNB.

- Microfinancing Support: The loan limit for the Micro Financing Scheme will be increased from RM50,000 to RM100,000 starting January 2025.

- Halal Industry: RM1 billion in guarantees for halal SMEs, with an additional RM100 million to promote Islamic financial innovation.

Energy Transition and Environmental Protection

- Energy Rebates: RM70 million e-Rebates for energy-efficient electrical appliances.

- Electric Vehicles: PERODUA to launch EVs priced below RM100,000. The RM2,400 CKD motorcycle rebate will continue.

- Community Rangers: The number of community rangers increased to 2,500 to protect forest reserves, with an RM80 million allocation.

- Carbon Tax: The government will introduce a carbon tax on steel and energy industries by 2026 to promote low-carbon technologies.

Tourism and Economic Development

1. Tourism Enhancements: RM110 million allocated for upgrading tourist areas, ecotourism collaborations, and supporting UNESCO nominations.

2. Visit Malaysia 2026 Preparation: RM550 million set aside for boosting tourism promotion and activities.

3. Empowering Local Entrepreneurs: Increased efforts to support local MSMEs in penetrating export markets.

Trade and Investment

1. Trade Growth: From January to August 2024, trade surged by 10.2%, reaching RM2.14 trillion, marking 53 consecutive months of trade surplus since May 2020.

2. Johor-Singapore Special Economic Zone (JSSEZ): A memorandum of understanding signed in January 2024 signifies major economic collaboration between Malaysia and Singapore.

3. Digitalization Support for MSMEs: RM50 million allocated for Digital Matching Grants for MSMEs and traders, plus RM100 million from SKMM over five years to enhance the NADI Centers across the nation for online entrepreneurship.

Startups and Innovation

1. Startup Support: RM1 billion for the National Fund-of-Funds (NFOF) under Khazanah, starting next month. RM65 million allocated to Cradle Fund to help startups expand regionally and globally. KWAP will provide RM1 billion, with RM200 million focused on 2025.

2. Digital Transformation Investment: Major tech giants AWS, Microsoft, Google, and Oracle have committed USD16.9 billion in cloud infrastructure investments in Malaysia until 2038.

Cybersecurity and Disaster Management

1. Cybersecurity Legislation: A new Online Safety Bill will be drafted to address rising cyberbullying cases and enhance the responsibility of service providers, particularly for child safety.

2. Disaster Preparedness: RM600 million allocated to the National Disaster Management Agency (NADMA). Eight flood mitigation projects completed, with 12 more underway at a cost of RM3 billion.

3. Scam Prevention: Over RM380 million in suspicious transactions blocked, but scams remain a significant concern.

Social Welfare (Sejati MADANI)

1. Rural and Community Support: RM1 billion allocated for the Sejati MADANI initiative, including RM600 million for rural economic development, RM200 million for expanding the Kampung Angkat MADANI program, and RM100 million to empower Public Housing Project (PPR) communities.

2. University and TVET Involvement: RM100 million allocated for public universities and TVET institutions to contribute to community service through the Kampung Angkat MADANI initiative.

Anti-Corruption and Government Efficiency

1. Anti-Corruption Budget: The Malaysian Anti-Corruption Commissions (SPRM) budget increased to RM360 million. RM200 million allocated to the National Audit Department to support audits of companies receiving government funds.

2. Public Service Reform: The government will focus on improving public service efficiency, including extending operating hours for government counters and enhancing online queue systems for better service.

Infrastructure and Regional Development

1. East Malaysia Infrastructure Projects: Projects include the Sarawak Cancer Center (RM1 billion), Tawau and Miri airport expansions (RM253 million), and multiple phases of the Pan Borneo Highway (totaling RM25.1 billion).

2. Equalization Fund for Sabah and Sarawak: The government will double the Special Grant for Sarawak and Sabah from RM300 million to RM600 million in 2025.

Subsidy Targeting

1. RON95 Fuel Subsidy Targeting: Implementation of targeted fuel subsidies for RON95 petrol will begin mid-2025. The savings will be redirected to benefit the majority of the population.

2. Education and Healthcare Subsidies: The government plans to gradually reduce subsidies for higher-income groups to improve facilities in public schools and universities, as well as healthcare services for the underprivileged.

Revenue and Taxation

1. Projected Revenue for 2025: Government revenue is forecasted to increase to RM340 billion. A 2% dividend tax on earnings exceeding RM100,000 will be introduced to broaden the tax base.

As these initiatives roll out, it will be essential for stakeholders to collaborate and adapt to the changing economic environment. What are your thoughts on this year's budget? Don't hold back and comment below!